The Organizational Process

Organizational structure

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.[1] It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. [2] Organizations are a variant of clustered entities.[citation needed] An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organizations actions.[2]

Organizing, like planning, must be a carefully worked out and applied process. This process involves determining what work is needed to accomplish the goal, assigning those tasks to individuals, and arranging those individuals in a decision-making framework (organizational structure). The end result of the organizing process is an organization a whole consisting of unified parts acting in harmony to execute tasks to achieve goals, both effectively and efficiently. A properly implemented organizing process should result in a work environment where all team members are aware of their responsibilities. If the organizing process is not conducted well, the results may yield confusion, frustration, loss of efficiency, and limited effectiveness.

In general, the organizational process consists of five steps (a flowchart of these steps is shown in Figure 1 ):

Figure 1 The organizational process.

1. Review plans and objectives. Objectives are the specific activities that must be completed to achieve goals. Plans shape the activities needed to reach those goals. Managers must examine plans initially and continue to do so as plans change and new goals are developed. 2. Determine the work activities necessary to accomplish objectives. Although this task may seem overwhelming to some managers, it doesn't need to be. Managers simply list and analyze all the tasks that need to be accomplished in order to reach organizational goals. 3. Classify and group the necessary work activities into manageable units. A manager can group activities based on four models of departmentalization: functional, geographical, product, and customer. 4. Assign activities and delegate authority. Managers assign the defined work activities to specific individuals. Also, they give each individual the authority (right) to carry out the assigned tasks. 5. Design a hierarchy of relationships. A manager should determine the vertical (decision-making) and horizontal (coordinating) relationships of the organization as a whole. Next, using the organizational chart, a manager should diagram the relationships.

Steps in Planned Change

Once managers and an organization commit to planned change, they need to create a logical step-by step approach in order to accomplish the objectives. Planned change requires managers to follow an eight-step process for successful implementations, which is illustrated in Figure 1 .

Figure 1 Stages of planned change.

1. Recognize the need for change. Recognition of the need for change may occur at the top management level or in peripheral parts of the organization. The change may be due to either internal or external forces. 2. Develop the goals of the change. Remember that before any action is taken, it is necessary to determine why the change is necessary. Both problems and opportunities must be evaluated. Then it is important to define the needed changes in terms of products, technology, structure, and culture. 3. Select a change agent. The change agent is the person who takes leadership responsibility to implement planned change. The change agent must be alert to things that need revamping, open to good ideas, and supportive of the implementation of those ideas into actual practice.

4. Diagnose the current climate. In this step, the change agent sets about gathering data about the climate of the organization in order to help employees prepare for change. Preparing people for change requires direct and forceful feedback about the negatives of the present situation, as compared to the desired future state, and sensitizing people to the forces of change that exist in their environment. 5. Select an implementation method. This step requires a decision on the best way to bring about the change. Managers can make themselves more sensitive to pressures for change by using networks of people and organizations with different perspectives and views, visiting other organizations exposed to new ideas, and using external standards of performance, such as competitor's progress. 6. Develop a plan. This step involves actually putting together the plan, or the what information. This phase also determines the when, where, and how of the plan. The plan is like a road map. It notes specific events and activities that must be timed and integrated to produce the change. It also delegates responsibility for each of the goals and objectives. 7. Implement the plan. After all the questions have been answered, the plan is put into operation. Once a change has begun, initial excitement can dissipate in the face of everyday problems. Managers can maintain the momentum for change by providing resources, developing new competencies and skills, reinforcing new behaviors, and building a support system for those initiating the change. 8. Follow the plan and evaluate it. During this step, managers must compare the actual results to the goals established in Step 4. It is important to determine whether the goals were met; a complete follow-up and evaluation of the results aids this determination. Change should produce positive results and not be undertaken for its own sake. Keep in mind that a comprehensive model of planned change includes a set of activities that managers must engage in to manage the change process effectively. They must recognize the need for change, motivate change, create a vision, develop political support, manage the transition, and sustain momentum during the change.

Instructions
1. How to Create an Organizational Structure
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Make decisions about how the business will operate in terms of raising money for its operation; whether or not it will have employees; with whom it will do business; who will be involved in the business and more. Ideally, all of this information will have already been outlined in a formal business plan.

Determine who will manage and operate the business. Will you do it alone or with other family members? Will outsiders be involved in management (other than in a consulting role)? Who is the business supposed to financially support? How quickly is that support required?If you (or you and your spouse) are the sole owner(s) and operator(s) of the business and it doesn't require funding outside of what you can provide or what you can raise through business grants and/or loans, then a sole proprietorship might be an appropriate organizational structure for your business.
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If a sole proprietorship structure seems appropriate, file the paperwork for that organizational structure within your state. In most states, such paperwork is pretty simple. In some instances, it is as easy as opening a bank account in the name of the business and obtaining an Employer Identification Number (EIN) if your business intends to have employees. It is this simplicity that appeals to most new business owners. However, there are disadvantages as well. In a sole proprietorship, you and your business are considered one and the same so you are 100% liable for anything that happens within the business. This will mean that you cannot take advantage of some tax benefits offered to other businesses.
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If you and a friend or family member other than a spouse intend to go into business together, without outside management or additional financial support other than what you can provide or what you can raise through business grants and/or loans, a general partnership may be just the ticket. This structure is also fairly easy to start in most states. As with a sole proprietorship, partners are each 100% responsible for what happens in the business, rather than the liability being divided across the board.General partnerships allow two or more owners to work in concert to run the business, sharing its income as well as its liabilities. In many states, such partnerships operate similarily to sole proprietorships and don't require a partnership agreement. However, entering into anything that involves money without everything spelled out in writing is ill-advised. If one partner makes questionable or bad decisions without telling his or her other partners, they remain responsible nonetheless.
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A limited partnership is often entered into when a business needs to raise money for its operation quickly without a lot of complication. Limited partnerships are generally structured so that the general partner has total control over the way the business operates while the limited partners are there primarily for funding purposes. A partnership agreement may be drawn up in such a way as to give limited partners voting or veto rights or other responsibilities within the business. In any case, this organizational structure will require a formal partnership agreement. Some states require a certain type of documentation while others do not. To determine the requirements in your state contact the Secretary of State's office. He or she can provide you with any specific requirements made upon limited partnerships within that state.
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A limited liability partnership is generally generally formed to help a business raise revenue while extending limited liability to those partners that provide such funding. It is a highly structured and complicated business structure that can have strict operational rules imposed upon it by the state. Because this form of partnership can be draw up in any number of ways, it is best to contact an attorney with expertise within that arena in establishing such an agreement.
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Businesses that will have multiple owners and operators, will need a large sum of money to operate, carry a large assortment of employees, do business across state lines or internationally require a more complex business structure. The most common form is a Sub Chapter S Corporation. It is much more advantageous because it provides liability protection for the company's owners. The burden for what happens within the business is borne by the corporation itself. The structure also allows the company to sell shares of stock to family and friends; up to 75 people. (Note: Any advertised or intentional selling of stock outside of that falls under a set of rules outlined for public domain.) It also gives the business an opportunity to tap into a multitude of talent held by corporate stock holders. Additionally, this form of business has more tax flexibility than any other structure.Because a Sub Chapter S is highly structured, it provides a mechanism through which the business must operate. Some business owners find this too rigid while others appreciate the structure and protection that this business form offers. Sub Chapter S Corporations are generally regulated through the office of the Secretary of State. Those interested in this business form should contact that office for paperwork and assistance in meeting state requirements. There are also a multitude of books available on the market today to help a business owner walk through this complex business structure. The company will have to obtain a separate bank account in the name of the business, an Employer Identification Number, develop a set of articles of incorporation by which it will operate, and hold meetings of the owners a certain number of times each year.Sub Chapter S Corporations are filed as standard C Corporations in the beginning. The business has 75 business days to file for the Sub Chapter S status. Those failing to do so will remain C Corporations and will miss all of the tax benefits of a Sub Chapter S.
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Businesses that will have multiple owners and operators, will need a large sum of money to operate, carry a large assortment of employees, do business across state lines or internationally require a more complex business structure. The second type of structure that might work for these requirements is the Limited Liability Company (LLC). Like a corporation, an LLC is more advantageous because it provides liability protection for the company's owners. The burden for what happens within the business is borne by the company just like in a corporate structure. The LLC structure also allows the company to sell pieces of the company to up to 75 "members". It also gives the business an opportunity to tap into a multitude of talent held by those members. Outside of the Sub Chapter S Corporation, this form of business provides the most tax write off capabilities.An LLC also provides a mechanism through which the business must operate. Some business owners find this too rigid while others appreciate the structure and protection that this business form offers. LLC are also usually regulated through the office of the Secretary of State. Those interested in this business form should contact that office for paperwork and assistance in meeting state requirements. There are also a multitude of books available on

the market today to help a business owner walk through this complex business structure. The company will have to obtain a separate bank account in the name of the business, an Employer Identification Number, develop a set of articles of organization by which it will operate, and hold meetings of the owners a certain number of times each year.
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Fill out the appropriate paperwork for the legal business structure you have chosen and follow any other requirements established by the state in which your business will operate.
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Maintain the standards and paperwork required for the operation of your chosen business structure within the state where your business is located